Abu Dhabi’s real estate market recorded steady and broad-based growth in the first quarter of 2025, with gains across residential, office, retail, and hospitality segments, according to ValuStrat’s latest market review.
Residential Real Estate Highlights
In the residential segment, Abu Dhabi experienced notable price increases, with values rising by 2.1% in Q1 2025 and 7.2% annually. Villa prices saw exceptional growth, appreciating 2.7% in the first quarter and 9.8% year-on-year. Apartments also enjoyed a positive trend, increasing by 1.5% in Q1 and 4.5% year-on-year.
Analysts attributed this rise in residential capital values to a mix of factors: sustained demand from local buyers, investor confidence, and a limited supply of new housing options. The average home value in Abu Dhabi reached an impressive Dh10,226 per square metre, with apartments hitting Dh10,979 per m² and villas at Dh8,407 per m².
Villa and Apartment Performance
Diving into specifics, Saadiyat Island led the way for villas with remarkable annual capital gains of 21.2%. Other notable areas included Al Raha with 8.2% growth and Mohammed Bin Zayed City with 4.7%. On the apartment side, Al Reef saw the highest gains at 7.5%, followed by Saadiyat Island at 6.2% and Al Muneera Island at 5.7%.
Rental Market Insights
The rental segment also showed promising growth, with prices increasing 2.2% in Q1 and 9% year-on-year. The average asking rents in Abu Dhabi City reached Dh114,000 annually. More specifically, studio apartments averaged Dh63,000; one-bedroom units went for Dh89,000; two-beds averaged Dh125,000; and three-bedroom units commanded Dh180,000.
Office Space Dynamics
Turning to the office market, Abu Dhabi displayed resilience with high occupancy rates and substantial rental growth. Asking prices for office units climbed 6% in Q1 to Dh2.25 million, while rents in core commercial districts skyrocketed by 8% in Q1 and an astonishing 31.8% year-on-year. Occupancy levels in these core areas exceeded 90%.
As for total office supply, Abu Dhabi has reached a substantial 3.9 million m² of Gross Leasable Area (GLA), with several new office projects expected to come online this year, notably the HB Office Tower on Yas Island and Masdar City Square, which will add 50,000 m² of new space by Q2 2025.
Retail Sector Growth
The retail segment enjoyed sustained benefits from strong foot traffic and tenant sales. In Q1 2025, the shopping center stock totaled 1.95 million m² of GLA. A significant upcoming addition is the redevelopment and expansion of Al Jimi Mall, which will increase its total built-up area to 91,000 m².
Haider Tuaima, Managing Director & Head of Real Estate Research at ValuStrat, emphasized that "the retail segment remained resilient, supported by robust foot traffic and tenant sales," indicating a healthy retail environment.
Hospitality Sector Highlights
Lastly, the hospitality sector showed impressive growth in early 2025, driven largely by a surge in tourism. Hotel occupancy rates in Abu Dhabi averaged 86.9% in the first two months of 2025, marking a 1.2% increase year-on-year. The city welcomed about 800,000 hotel guests by February, contributing to a total of 5.2 million visitors during 2024, a notable 28.7% annual rise.
Currently, Abu Dhabi boasts 34,372 keys in its hotel inventory, with projections suggesting this supply will exceed 50,000 keys by 2030.
This broad-based growth across various segments of Abu Dhabi’s real estate market reflects a thriving economic environment, fueled by multifaceted demand and strategic development initiatives.
